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Laurie: Hi, this Laurie McCabe from the SMB Group, and in today’s SMB Spotlight I’m speaking with John Mason, who is IBM’s new General Manager and VP for Midmarket. Hi John. Thanks for joining me on this two-part discussion about developments at IBM in the midmarket and SMB space. In our first discussion, I’d like to focus on the IBM acquisition of SoftLayer, which I understand provides dedicated hosting, cloud computing and cloud services offerings.

Before that though, I’d like to learn more about you and your background. I understand you’re relatively new to IBM. Can you tell us a little bit about where you’ve been and what kind of experience you bring to your role?

John: Thanks Laurie. I appreciate the opportunity to speak with you. I joined IBM three months ago. I started my career at Compaq in the 80s. I spent thirteen years there and moved to Cisco, and ran the SME and midmarket business with Cisco in Europe, Middle East, Africa.

Then, I ran global channels for Nokia’s Enterprise business. I also ran a mobile cloud service in eReading and News for a couple of years, and a white label mobile messaging service provider that had been acquired during my time there.

So, when the discussion started with IBM, it was an interesting combination of different hardware, software and services businesses in small and midsize enterprise and across mobile and social. It was the opportunity to combine that with IBM’s amazing global reach in over 170 countries and find ways to get that to the millions of small and midsized companies. Many are possibly not even doing any business with IBM today but can benefit from those solutions.

Laurie: What will you be focusing on in your new role as GM, John?

John: Finding new opportunities to grow the business and bring mobile and social and analytics, and particularly cloud solutions to small or midsized businesses. This means working very closely with our partner organization and focusing on MSPs as the key route market.

Laurie: Thanks for that background. So help me understand a little bit about the SoftLayer acquisition and why it’s so important. IBM makes a lot of acquisitions in general, and I think probably at least a dozen in the cloud area. What makes SoftLayer stand out for IBM?

John: This is one of those few times in our industry where there’s an absolutely fundamental shift that changes everything. When client-server computing started taking off was one, and when mobile really went to a whole new level was another. Now, with cloud, we’re seeing a major shift, which is very beneficial to smaller and midsized companies. They may not have the IT expertise in-house to take advantage of some of the technologies that larger companies are able to use, but now through cloud, they can use more advanced solutions without having to deal with the complexities.

Laurie: Tell us about what SoftLayer does and how that will help IBM help SMBs? What does it give IBM you that it didn’t have in the cloud area?

John: The SoftLayer acquisition was driven by a change in the way that customers are looking to buy. I would say it’s as simple as answering these questions. Is this technology solution is going to be hosted at your place or mine? Is this something that I have to build and manage on my premises, or is it something that I can tap into through a web browser to connect to infrastructure that’s sitting somewhere else outside of my physical office buildings? Then, is that going to be dedicated to me or is it something that I share with somebody else? So, it’s really your place or mine, shared or dedicated, and what software brings is the ability to offer the full range of different deployment options.

That’s whether it’s a complete public cloud solution or it’s a private cloud or it’s some mix of some parts public, some parts private in a hybrid deployment. SoftLayer lets us accelerate our ability to deliver those pieces across a broad range of different businesses and different services.

Laurie: What about purchasing and pricing mechanisms for customers?

John: Yes, that’s really key. It’s really important to make it easy and simple to understand what the offering is, and how can I choose the combination that is right for me. Then make it really easy for them to purchase and deploy that solution.

The beauty of SoftLayer is they have a very simple credit card purchase capability. You can be up and running literally within the hour and choose whether you want to be billed monthly or hourly. It’s simple and flexible, and that’s as important as the underlying technology.

Laurie: One of the other things that I’m curious about is that it seems like managed services is another big part of the SoftLayer business. IBM has been heavily courting managed service providers (MSPs) for quite some time. Does this create a conflict with them?

John: SoftLayer is really complementary to what we’re doing with MSPs. In fact, we’ve had a number of key wins with MSPs for SoftLayer with service providers who have said, “I really don’t want to have to manage this infrastructure myself. It’s not my core business. My focus is on security services or hosted exchange services. So, rather than me scarce resources building and managing an infrastructure layer, I’d rather focus on the higher value services on top of that, and I’ll use SoftLayer as infrastructure.”

Laurie: Will they be able to resell SoftLayer?

John: Yes, there’s that too. MSPs can use SoftLayer themselves as part of their own infrastructure, or they can resell it to customers together with other value-add services that they bring to the mix.

Laurie: Where does SoftLayer sit in terms of IBM’s SmartCloud services?

John: SoftLayer gives us the ability to accelerate our own leadership position, scale out the smaller cloud service portfolio, add additional higher value services and solutions across mobile and data analytics, social–together with partners. It’s the combination of all of that into a solution that adds value for customers.

Laurie: What kind of experience in SMB and midmarket does SoftLayer bring that IBM can leverage, and how will you do that?

John: I mentioned this earlier in our conversation when we talked about what attracted me to the role at IBM. Frankly, the SoftLayer acquisition hadn’t closed but had been publicly announced. That was a real additional level of credibility that we could use to address the SMB market because SoftLayer had over 20,000 SMB customers already. They clearly have a very strong focus on that market and a solution that is very simple, easy for the smaller customer to understand, choose, purchase, deploy and operate.

So, to me that said IBM’s not just talking about the midmarket, but actually putting a significant investment in technologies, ease of purchase and deployment to enable this. SoftLayer convinced me that we very serious about this and that was a decider for me.

Laurie: What does the bigger go to market plan look like? Many SMBs still think IBM doesn’t have solutions that are relevant for them. How are you going to change that?

John: First, we need to be careful that we don’t hug SoftLayer to death. We need to give them space to continue to operate their own very successful go to market model. There’s always a risk when a big company acquires a smaller company that sometimes the big company process can slow down the smaller company. We will be very diligent about ensuring that doesn’t happen and that SoftLayer continues to operate somewhat independently with their existing go to market model.

At the same time, we need to take advantage of what they bring and combine that with IBM’s traditional business partners, managed service provider partners, and some of the ISVs that we work with. Really, this is more about connecting the ecosystem that needs to work together to deliver solutions to small and midsized companies. SoftLayer helps us accelerate that with a full range of all types of different deployment options–everything from bare metal dedicated servers, virtualized shared servers, managed private and public cloud through to a full range of storage and networking and managed services.

Laurie: So, what does success look like here if this all goes according to plan?

John: I think we’ll see continued acceleration of cloud adoption within small and midsized companies and SoftLayer will help to significantly accelerate the deployment of both hybrid private and public cloud solutions for small and midsized companies. I certainly expect the 20,000 existing SoftLayer customers will increase significantly without putting a specific number on it. Beyond that, it’s about helping MSPs to accelerate their offerings with more value-add services above and beyond the infrastructure layer. That way we really bring complete solutions for small and midsized companies that are simple to deploy and use.

Laurie: John, thank you for joining me, and I look forward to our next discussion, when we will talk about IBM’s other new plans for SMB and mid-market customers.

John: Thank you Laurie. I appreciate the opportunity to have this discussion and certainly look forward to future discussions we’ll have.

This is the first of a two-part SMB Spotlight interview with John Mason, IBM’s General Manager and VP for Midmarket, sponsored by IBM. In the second post, I’ll ask John about other new IBM strategies and developments for SMB and midmarket companies and channel partners.

We are all becoming increasingly dependent on technology–connecting more devices to more servers and networks to communicate, collaborate, automate and get our jobs done. New mobile and cloud technologies put more information and resources at our fingertips than ever before. We’re updating solutions, devices and infrastructure sooner rather than later to leverage technology that can help us to improve employee productivity, attract new customers and streamline operations.

But we also need to think about the resources required to develop and use technology. What chemicals, metals and synthetic materials are needed manufacture and package bright and shiny new technology devices and systems? Where do these materials come from? Where do they wind up when we discard them for newer ones? How much energy does it take create technology products? And how much power is required to cool massive cloud and corporate data centers–or even just a couple of servers in your office?

While we tend to think that only IT vendors and big businesses can have a significant impact on the environmental impact of technology, all businesses, regardless of size, can use green technologies and practices to contribute to environmental sustainability–and at the same time, reduce costs.

What Is Green IT?

Green IT is the practice of managing technology resources in a more efficient and environmentally responsible way. Relevant areas include:

Reducing e-waste. Many metals, minerals, wood products and chemicals required to make and package technology devices. According to the Foundation for IT Sustainability (http://www.ffits.org/), ten percent of the world’s gold production is used in electronics, but only 30 percent of this gold is recovered from scrap. Even worse, only 10% of the copper used in electronics is recovered. Overall, the U.S. EPA estimates that in 2010, just 27% of the 2,440,000 tons of e-waste generated in the U.S. was recycled. This means that 73% is sitting in someone’s attic or trashed–potentially oozing into the soil and eventually into rivers, streams and oceans. In addition, many of these resources are not renewable–so we hasten depletion of a finite supply if we don’t reuse them.

Decreasing energy consumption. Consider the energy used to power our devices and data centers. For the most part, this energy is generated through coal-fired plants, which creates the greenhouse gas emissions that are a major cause of global warming. According to this Digital Power Group report, today’s technology and telecom ecosystem now consumes almost 10% of the world’s electricity-about 50% more energy than global aviation industry.

Solving environmental issues. Technology solutions can help us understand and remedy and/or prevent environmental issues. For instance, climate change modeling requires super-fast computers to crunch through data to calculate things such as a how fast sea levels are rising, or the likelihood of hurricanes and storms becoming stronger.

According to a recent BLS Green Technologies and Practices (GTP) survey, 57% of U.S. businesses use green technologies or practices to improve energy efficiency within their establishments, and over half use these green IT to reduce waste materials.

SMBs that want to start or build on a green IT strategy should consider not only how they can use technology in a more sustainable way, but also purchase solutions from vendors with a commitment to developing green IT solutions and services.

Why Dell Cares About Green IT

Technology vendors have a major role to play in green IT. They can build computers with more environmentally friendly materials, design them to consume less energy, provide recycling programs to dispose of old systems, develop virtualization and cloud computing alternatives, and provide service to help businesses that want to go green.

Dell embraced green IT from early days, when it began its “Design for Disassembly, Upgradeability, Serviceability” initiative. In 1994, Dell became a founding member of the U.S. EPA’s Energy Star Program, integrating energy efficiency into every product line.

The company’s impetus is to make it easier for customers to be green. Dell makes it a point to design with the environment in mind and by embracing sustainability in its own practices, it helps customers reach their own sustainability goals while taking control of resources that create value.

Since then, the company has become an innovator in environmental sustainability.

In its fiscal year 2013, Dell has achieved several environmental milestones:

Doubled use of green electricity in Dell facilities. In 2013, 16 Dell facilities purchased 100% renewably generated electricity, more than double the number doing so in 2012.

Slimmed down packaging. By switching to padded envelopes for more than 500 items, Dell has reduced shipment weights by 73% to decrease packaging waste.

Increased use of recycled plastics. Dell has put 7.8 million pounds of recycled soda bottles and other plastics back to work to create backings for monitors and housing for desktops.

Expanded its EPEAT program. Dell customers can now recycle over 200 products, including printers, in nine countries. Dell has recycled more than 1 billion pounds of electronics since 2008.

Grew its employee work from home program. 20% of Dell’s workforce now telecommutes, saving an estimated 13 million kWh of energy, and 6,785 metric tons of greenhouse gas emissions–and save $14 million annually on facilities expenses.

Spreading the Green Around

Dell has extended its sustainability initiatives well beyond its own internal operations and goals. For instance, in 2013, the company added social and environmental (SER) criteria to its global supplier selection process, including criteria for clean water and air discharges.

In addition to broadening its EPEAT imitative, Dell is helping customers build proactive, sustainable IT strategies that not only benefit the environment, but save money and streamline operations. Dell Services helps customers assess current technology practices and determine options to green up existing practices, and/or develop new approaches to meet sustainability and fiscal goals.

With each new generation, Dell products consume less power. For instance, Dell has reduced energy consumption in its desktop and notebooks 25% since 2008, and Dell servers are warranted to run for extended periods at up to 113°F/45°C with only fresh air cooling. Dell KACE Appliances offer green IT management capabilities that conserve energy by controlling how quickly desktops go into low power states.

Taking a green IT approach can also provide companies with benefits beyond energy reduction and cost savings:

The University of Nebraska-Omaha slashed energy use by 93% and also increased student access to client computers by replacing traditional desktops with Dell Wyse thin clients.

Amerijet cut facility costs by 60 percent through energy efficiency and reduced the time to print a manifest and close flights by 96 percent by implementing a virtualized data center and new business processes.

Perspective

Dell and other IT vendors have a huge role to play in ensuring that we use consume and use technology in a more sustainable way.

But the green IT story isn’t just for Dell and other big businesses. SMBs can develop green IT strategies to reduce their carbon footprint, and gain business and IT benefits in the process.

In the next post in this series, I’ll provide some practical tips to help you get started or continue on the path to help your business reap the benefits of going green.

This is the first in a two-part series sponsored by Dell that discusses why green IT is important, and how SMBs can develop and benefit from their own green IT initiatives.

Originally published on October 1, 2013 on QBSBDC.com as the second of four blog posts in a series designed to help small businesses, and those that serve them, be successful.

Nearly 80% of active U.S. internet users visit social networks and blogs, according to the SMB Group’s 2012 SMB Social Business Study. This explains why social media marketing is commonplace and effective for most large companies. At the same time, only 28% of small businesses using social tools identify themselves as applying social in a ‘planned, strategic way.’

Small businesses that use social media in a strategic way are more likely to be satisfied with results than those using it in an ad hoc way. Social media can give a small business the boost it needs to advance to the next level. In fact, 42% of small businesses using social media reported an increase in leads or traffic to their website.

What does it mean to be a strategic user of social media? Here are five best practices worth exploring:

Step 1: Scope out the competition

Spend a little time on the most popular social media networks and check out how your competitors use those sites. Where do they post? What do they write about? How often do they post? Next, set up your own accounts and start experimenting.

Step 2: Explore customers’ use of social media

Discover how often your customers visit social media sites, what information and experiences they seek, what tools they prefer and what kinds of information they share.

Step 3: Research what people are saying about you

As you become more familiar with social media, look at how people engage with your company online, including positioning, credibility and following on social networks.

Step 4: Ramp up gradually

Start slowly and then maintain a steady pace. If you begin by posting frequently and then peter out to nothing, your fans could lose interest.

Step 5: Have a game plan and chart progress

Create a series of posts to cover at least three months of social media activity. Think in terms of upcoming holidays, seasonality, your own promotional calendar, and other time-linked events. This will help keep the content fresh and relevant to your audience.

Of course, you should update your scheduled posts if there is a newsworthy event, showing you are in tune with what is going on. Always respond promptly to social media messages about your business to demonstrate that you are listening to customers and engaged.

Originally published 9/30/13 on the SMB Group website. Click here for a link to the original article and to listen to the accompanying podcast.

Laurie: Hi, this is Laurie McCabe from the SMB Group and today I’m talking to Rich Pearson who’s the Chief Marketing Officer at Elance, which is the leading online work platform. Rich, before we get in to what Elance does, can you tell me a little bit about the company; how long it’s been around, how you started, and that kind of thing?

Rich: Sure. The company was started in 2007 and is based in Mountain View, California. We have 110 employees and we actually are a hybrid company in that we use about 200 freelancers every month to help us compete and fill our own talent gaps. So we use our own service as a company to compete.

Laurie: Okay, and what was the impetus to get Elance going? Why did you start it in the first place?

Rich: We felt—and we’re seeing it now—that the world of work was changing. Freelancers and many independent professionals were looking to work from wherever they lived. We believe, and our vision is, that talent is what really matters. As companies get more comfortable with hiring remotely and with the communications tools and even hiring from the “cloud” if you will, we thought this would be the future of work.

We’re probably only in the first inning of this, but from all the results that we’ve seen to date, this is definitely happening. It’s a real phenomenon. As an example, we’ll pay out $300 million dollars in freelancer earnings just in 2013. So, it is a phenomenon that is accelerating quite rapidly.

Laurie: Well, that is good background about Elance. Can you get into a little bit of detail about what Elance provides, how people use it, and who’s using it?

Rich: Sure. What Elance is at its core is a way for small businesses—and over 90% of the businesses who hire on Elance are small businesses typically under ten employees—to find freelancers, hire them, and then actually pay. So, actually do the work through our system. The way that works is a company will come in, post a job, say they need a graphic designer for a few weeks, and they’ll get proposals from freelancers who meet those criteria. We’ll actually recommend some freelancers so you can invite them, and then the freelancers essentially bid on your work. They can bid on a project base; a certain amount of money as a fixed fee. Or, if you’re looking to hire somebody on an hourly basis you can also see freelancers’ rates that way.

You can see their portfolio, you can see what work they’ve done, and then can choose which freelancer you want to work with. Then you actually do the work on our platform, they deliver it through the platform, and you pay through the platform. So, that’s the basics on how it works. There are some additional details that I can share later but I just wanted to start there.

Laurie: That’s great. I know you guys recently did a study to get a better understanding of how small and medium businesses are using your Elance services. What are some of the top trends that came from that?

Rich: We did. As a baseline there, there are 800,000 companies hiring on Elance in any given month. We have over 2.8 million freelancers who are active on the service. 40% of those freelancers are in the US.

So, what we do periodically is have studies, such as our Global Online Employment report, and use our own data to see what’s happening in this phenomenon, in this emerging world of work. Overall businesses in the last quarter, hiring increased 51% year-over-year. In this economy you don’t necessarily see hiring numbers like that and I think just today that the numbers came out and were a little bit south of projections. So, as usual, small businesses are leading the way with new ways of getting work done more effectively.

The biggest insight from the survey that we’ve seen over the last 12 months but is accelerating is the use of businesses that recognize they have a skill gap and are filling that with an online freelancer. So, 70% of businesses say that they’re using Elance to fill a skill gap. That skill gap could be someone needing a mobile app developed, a brochure designed, or just someone to help launch a website.

The number and quality of the skills that you can get online is amazing. It takes a little bit of a change in behavior. I know my wife has her small business and initially when she’s thinking to get some help she’ll look around locally and, here in Mountain View at least, with the scale of her business first there weren’t that many people who were available because they’re all busy because the economy is pretty strong here. It’s also fairly expensive to hire someone in the Bay Area right now. So, what she can do though is hire somebody outside the Bay Area, San Francisco Bay Area, and get someone who’s willing to work right away and often at a discount for what she can find locally.

So, there’s the cost savings aspect to it, there’s a speed of getting something done, and then you don’t have to sacrifice quality. In fact, in the survey, 87% said that the quality that they’re getting online is greater than or equal to what they’re getting locally. So, it’s becoming a core part of their strategy in that some have gone where they’re hiring freelancers not just for project work but 50% are hiring for projects that go over six months and almost doing a staff augmentation if that makes sense.

Laurie: Where are most of your freelancers from? Are a lot of them from overseas?

Rich: 40% are in the US and as you look at what makes Elance distinct from say some other services that may be out there is we have a core strength in US and North American freelancers. We do have really talented freelancers in Eastern Europe, Serbia, Romania; some of our best mobile designers and engineers we find there. We also have a group based in the typical, that you’ve probably heard about, in India as well. There are different strengths of each individual and you can certainly get things done cheaper and it really becomes what you’re looking for and what type of quality you’re looking for; what type of work you’re looking for.

One thing that I’ve done recently is hired a virtual assistant to help me as I’m planning my month or planning what I need to do. So, this person is helping me personally. I’m not great at anything; in fact at Power Point I’m not very good at all, or any type of presentations or graphic design, so I’ve hired somebody who I work with, talk on Skype or just send an email, and I’m able to make myself more effective using a freelancer.

Laurie: Yes, I think a lot of us are trying to do so much ourselves, a lot of times that would be much more time and cost effective for sure.

Rich: I look at my To-Do list and there are some things that I’m good at and some things I just don’t like doing, so I’ve been able to really kind of ease the burden and focus on the things I do great and then hire quality talent and do so in a very efficient way so that I can move my business ahead.

Laurie: Right. We’ve used Elance here at SMB Group for a while. I think one of the big benefits from this whole platform is that it helps you to manage everything from finding the freelancer through paying the freelancer. Can you just tell us a little bit about how that works?

Rich: Sure. As you said, Elance is more than just, say, a job board because you actually can find someone and then you actually work with them. What we provide is a secure workroom. After you’ve hired and negotiated the rate with the freelancer you’re placed in a workroom and then you’re able to communicate through that. Everything gets documented in this workroom so you don’t have to go back to emails to look at anything. You have one place where all your work’s been done, where files have been shared, where you can look at the latest work that has been done.

You can also set up milestones. For example if you’re working with a freelancer on a project you can set up specific milestones that they’re working at, much as you would do at work. On the payment side you can actually tie the payment to the milestones. Elance has an escrow service that puts the money in an escrow and then you don’t have to, as a business, release those funds to your freelancer until you’re satisfied with the work.

Laurie: It is easy and convenient; definitely.

Rich: We’ll take care of all tax implications; we’ll file the 1099s for businesses automatically. If it’s an hourly job you don’t have to worry about tracking work separately. All the freelancer’s work is tracked within our service and you can actually ask the freelancer to almost audit their work so you can see what they’re doing and then you’ll get an invoice through the system, just quick to approve it, and then that freelancer will get paid automatically through our service.

Laurie: As I’ve said, we have used Elance and have gotten a lot of benefit from it. But, I remember being kind of leery about it before we tried it. What would you say to somebody who hasn’t used it yet and is a little unsure? What’s a good way for them to kind of get started?

Rich: Great question. In fact, my first experience with Elance was I was with a small business and didn’t have much of a staff. There was myself and I had three engineers with me and I needed to build a website. I had the same experience and apprehension that you did. I guess there are a few tips.

First, you want to start with something small. Working with a remote worker is a different experience. It almost requires a little bit different skill sets and organization skills to really plot out what you need and make it as easy as possible for the freelancer to do what you need. The first thing I would say, that I faced and that everyone will face, is which freelancer to choose; how do I determine which one is the right one for me.

What we’ve done, and fortunately we’ve made this a lot easier since when I hired my first freelancer on Elance, is you have almost like as in eBay or any other service you can see the ratings from past freelancers. So, when a freelancer gives you a proposal what we’re going to do is rank them for you based on what we think based on their skill match. We think about how they match to you.

So, we do a little bit of the work for you, but hiring is a personal decision so it’s really important that you spend some time looking at the freelancers that we’ve recommended. You can look at their reputation, you can look at past comments from clients that they’ve worked with, you can see samples of their work, you can see if they’ve taken skill tests in the area that you’re looking for, and that really helps build trust in what they can do.

Once you’ve given them a small project, just check on their communication style, make sure you’re comfortable with it. A key decision to make when you’re hiring that I think for a new person on Elance is really the time zone of the person that you’re working with. In a lot of cases the newer businesses hiring on Elance select someone in their same time zone. Then, as you get more comfortable with it, it’s actually kind of empowering to hire someone outside of your time zone. So, you give them a project, you go to bed, and the next morning they’re working on it and you see the results. From a communication standpoint, being very clear with your freelancer after you’ve hired them to make sure that the work is appropriate.

If there is something that goes south on you and that the job doesn’t go right, and this is a very small percentage of the time, but we have a dispute team that will come in if someone has done something that is just misrepresentative of their skills, we’ll come in and we’ll refund your money. So, we do have payment protection for all clients.

Laurie: Awesome.

Rich: Our goal is to make everyone feel that first experience and have that trusted experience because if we don’t have that trust– that’s why we are the leading online work platform. That’s crucial to our success.

Laurie: Thanks. That’s a big benefit having that kind of safety net while you’re there. Based on my personal experience with Elance, I think it’s a great service.

Rich, thank you so much for your time today and for joining me today to talk about Elance. We will post a link to Elance.com with this blog and also a link to an infographic from your study so people can learn more about what you found out.

Rich: That’s super. One thing I didn’t mention, and thanks so much for the opportunity, it’s actually free to post a job on Elance. You don’t have to pay anything. So, as a business, just putting up your job there’s no cost to you. The way our pricing works is actually let’s say I posted a job for you and you thought that it was worth $1000 dollars. What Elance does is add 8.75%. So, I would see $1087.50. When the job was completed I would pay the job, you’d get your $1000 and Elance would get $87.50. So, that’s how Elance makes money.

But, to see what freelancers and amazing talent you can get online, all you need to do is go to Elance.com and post your job and you’ll be amazed.